A move that has captured the front page of every newspaper and breaking news headline of every news channel, the China-Iran Deal is an ambitious deal on security and economic partnership. The two sides had agreed on a comprehensive strategic partnership back in 2016 when Chinese President Xi Jinping had visited Iran and announced discussions to conclude a 25-year long bilateral pact.

Dating back to 200 BC., the relations between Iran & China bloomed when a civilizational contract was established between the Sassanian and Parthian empires, which are in present-day Central Asia and Iran, and the Song, Yuan, Ming and Han dynasties. Many Iranians were helping in the translations of Sanskrit sutras into Chinese when the Kushan Empire, which was instrumental in spreading Buddhism across China and Central Asia, became the crossroads for the  Sino-Indian Buddhist transmissions.

Majorly, China and Iran viewed themselves as successor states and empathised with each other since both had been humiliated at the hands of the foreigners. Relatively recently in 1971, the parties faced a rough time. Mohammed Reza Pahlavi, the Shah of Iran, who was close to the US., was visited by some of China’s topmost leaders.

Not after much delay, he was overthrown during the Islamic Revolution in 1979 which left not-so-good sentiments among the Iranians about China. The next turn came during the Iran-Iraq war. When Iran faced lack of arms and ammunitions, it turned to China who in turn, sold outdated and inefficient arms to the former. It also sold arms to Iraq discreetly while signing a contract with Iran for the supplies of anti-ship missiles.

While China was witnessing a global censure and numerous western sanctions on account of the Tiananmen Square incident which was a student-led demonstration calling for free speech, democracy, and free press in China, Iran battled with the death of Islamic Republic’s founder, very much beloved, Ayatollah Khomeini and the new helm of Ali Khamenei.

Till the 1990s, Iran’s nuclear and missile development programmes had been assisted by China’s direct supplies; but, after the latter’s commitment to Bill Clinton in 1997, China had to stop any further assistance and sales. Despite the setback, Iran carried on sufficiently. UN sanctions on Iran followed China’s decision to support the United Nations Security Council (UNSC) to take strict action against the Iranian nuclear programme after the International Atomic Energy Agency flagged violations.

Subsequently, the permanent members of the UNSC & Germany, or the P-5+1 countries negotiated the nuclear deal with Iran in 2015. But with the US. scraping off the deal in 2018, China had its shoulders safe for Iran and reinforced its negotiations to deepen the ties with Iran. With China’s foresight, it was easy for them to sow the seeds of friendship back in 2016 and today, their political contestation with the US is evident.

18 pages summarise how Beijing wants to buy oil from the cash-stripped Iran to facilitate the injection of $280 billion into their economy besides also investing $120 billion into the transportation and manufacturing sector of Iran thus giving it push into railways, telecommunications and banking sectors too. Since Iran is already a signatory in China’s BRI, if the indebted economy of Iran fails to service their loans as they are expected to, it would be forced to give in to China’s “debt-trap diplomacy” and be pressured to support China’s geostrategic interests.

As for India, the deal indirectly affects its stakes around the Chabahar Port. This Iranian sea-port has proved to be important for India as it facilitates sea-land connectivity to Afghanistan, eliminating the land route through Pakistan. Zahedan in Iran also comes into play since it is located near the Afghan border and the rail route of Chabahar-Zahedan is crucial for the smooth movement of Indian goods to Afghanistan. Being close to Gwadar port in Pakistan which is developed under China Pakistan Economic Corridor that links it to the Indian Ocean through the BRI, the port definitely holds a very strategic geographical position.

India has recently reported that operations at the port have been scaled up significantly despite the sanctions by the US, while at the same time saying that Iran had to nominate a formally authorised entity to sort the outstanding issues and was awaiting its response. But Iran has moved forward with the construction of the Chabahar-Zahedan transit route “in the absence of an active Indian engagement and partnership”.

This had come at a time of reports of unqualified support of China to Iran with respect to the $400 billion deal which poses a huge strategic, economic, financial and political threat to India since India has also committed Rs. 100 crores for it in the last budget. Even though India got a waiver from US sanctions contingent upon the fact that it will help provide access to Afghanistan bypassing Pakistan, it is still caught in the geopolitical rivalry since it has not been made clear whether railway projects, among others, are exempted from the sanctions or not.

With a plan to complete laying the 628-km railway track between Zahedan and Chabahar, Iran is all in. Even though India has committed to providing tracks and rakes, it will probably have to wait till Washington makes a concession on steel imports. The dilemma is also rooted in the fact that India is locked in a border stand-off with China. Anything that goes wrong will eventually lead to significant repercussions. If Biden comes to power, there may not be any threat to the sanctions but if Trump is re-elected, India would have to reconsider keeping in mind the relations between the leaders and the countries since “one cannot just spend Indian taxpayers’ money without making sure they won’t be under sanctions,”, says a government source.


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